RUSHB
Rush Enterprises, Inc.
$75.19
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 44.4% below fair value
You pay
$75.19
Bear
$98.13
Fair
$135.33
Bull
$171.32
Bear
$98.13
+30.5%
6% stage 1 growth, 11% discount
Fair
$135.33
+80.0%
9% stage 1 growth, 11% discount
Bull
$171.32
+127.8%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
12.5x
Market is pricing in (growth)
2.6%
vs 9.4% base
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $135.33 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions